Fear of revenue loss makes 
Punjab back farmer stir

The protests against farm sector reforms continue unabated, especially in Punjab and Haryana though efforts were underway to rope in farmers from other states as well. On Monday, Congress President Sonia Gandhi directed the party governments in four states ruled by the party to try and nullify the effect of the Central laws through their own separate legislations. There is no clarity on this aspect and it may eventually be required to be settled in the apex court. However, the open confrontation underlying the suggestion that the states undo the Central legislations further weakens the federal edifice. Encouraging an open negation of Central laws in such a frontal manner militates against the basic edifice of the Constitution. Hopefully, better sense will prevail and the issue of farmers reforms settled through consensus.

Maybe the Centre should take the initiative in organising a conference of domain experts to address the misgivings of farmers, in an attempt to nail the false propaganda unleashed by vested interests to depict the farm Bills as anti-farmer. Quite clearly, the Congress Party and other Opposition groups espy an opening for them to regain relevance, by fanning farmer protests against the reforms approved by Parliament in the just-concluded session. There should not be an iota of doubt that the opposition to the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, the Farmers’ (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, and the Essential Commodities (Amendment) Bill is animated only by political factors, ignoring the welfare of farmers, which the long overdue reforms seek to achieve.

Agri experts have endorsed these legislations, arguing that these would benefit both the farmers and consumers. In fact, we do not recall any other single piece of legislation in recent times which has elicited a near unanimous endorsement from domain experts, as have the farm sector Bills. One of the foremost specialists in the field is Ashok Gulati. In recent days, he has unhesitatingly welcomed the farm Bills, arguing cogently how farmers will gain from greater choice and freedom to sell their produce and how consumers will benefit from the countrywide cold storage and food processing chains and how this will diminish the role of intermediaries, such as 'arthiyas'.

Truth be told, vested interests in Punjab and Haryana see their stranglehold on farmers slipping, if a competitive platform is available for buying wheat and paddy, the staple produce in the two states. It is revealing that only about six per cent of farmers benefit from the MSP, a very large majority from Punjab alone. That explains why they are at the forefront of the agitation. Free water, free power, grossly subsidised fertilisers and seeds, etc., benefit big farmers in the state.

As Gulati says, the MSP regime has prevented Punjab farmers from diversifying, away from wheat and paddy, thus burdening the godowns of the FCI with unmanageably huge stocks of both. By the end of the month, the FCI will be saddled with grain stocks of about 75 million metric tonnes, against the norm of about 30 million tones. Holding such high stocks further pressures the FCI finances, since it has to borrow from the market at a competitive interest rate, to pay for the unviable levels of procurement.

What is also not appreciated is that Punjab collects about Rs 3,500 crore annually from mandi fees, whereas 'arthiyas' get another 2.5 per cent as commission. The total 8.5 per cent is paid by the FCI, since the state government procures on its behalf. The state uses as this amount as it wishes, since it is not part of the CAG-audited revenue pool. This should explain the bitter opposition of Congress Chief Minister Amarinder Singh. It is notable that the protests in the neighbouring Haryana, with a BJP-JJP ruling in the state, have been rather muted.

Meanwhile, the standoff over the farm sector reforms ought to caution the ruling party against undertaking legislative initiatives without reaching out to the Opposition. Even if the Congress Party, in its 2019 manifesto, had unequivocally stated that it would repeal the APMC Act “and make trade in agricultural produce --- including exports and inter-state trade -- 'free from all restrictions'", and further that "we will establish farmers’ markets to enable them to freely market their produce in towns and villages", the party in Opposition cannot be held accountable for a 180-degree turn. The BJP cannot complain. It too had made many such U-turns while in the Opposition. Its priority should be to nail the false propaganda behind the farm stir in Punjab.

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Free Press Journal